Ethiopia has denied claims that 25 of its soldiers have been killed by rebels in its oil-producing Somali region.
The Ogaden National Liberation Front (ONLF) said it attacked a military convoy escorting the Chinese oil firm PetroTrans on Tuesday.
Twenty-five government soldiers and several of its fighters were killed in the ensuing clashes near the regional capital, Jijiga, the ONLF said.
The group has been fighting for the region's independence since 1984.
The ONLF said its forces ambushed elite Ethiopian troops escorting a team from PetroTrans to an oil exploration site in the region, which it calls Ogaden.
"The liberation army inflicted extensive damage on the Ethiopian troops," it said.
The government said the ONLF's claims were "absolutely unfounded", the AP news agency reports.
Correspondents say the region - where ethnic Somalis are the majority - is largely closed to independent observers, making it difficult to verify the claims of the two sides.
The ONLF warned of more attacks on Chinese-owned companies.
"The Chinese are wearing army camouflages and, as such, it is very had to differentiate them from the Ethiopian army personnel," it said.
"It is the responsibility of civilians to be clearly distinct when travelling with combat military units in order to safeguard their rights."
In 2007, the ONLF attacked a Chinese-run exploration site in the region, killing 74 people.
The ONLF says it is fighting for the rights of Somali-speaking Ethiopians who have been marginalised by the government in Addis Ababa.
Human rights groups have repeatedly accused the government of widespread atrocities in the region.